Governance News 7 February 2024

40 minute read (PDF download) 07.02.2024 Mark Standen, Siobhan Doherty, Kate Hilder

This week's issue has a strong ESG focus. A raft of shareholder ESG proposals have already been filed ahead of 2024 meetings. Big tech companies are facing multiple human-rights related proposals with a specific AI focus. Meanwhile, shareholder focus on nature-related risk, climate and labour rights issues looks to be continuing. On the financial services front, ASIC and APRA have provided an update on their expectations for banks around compliance with the FAR in the initial months of the regime. Separately, ASIC Chair Joe Longo outlined his perspective on AI regulation and more...

Shareholder Activism Navigation Show below Hide below

Nature-related risk/biodiversity loss | Green Century claims credit for Home Depot's new stance on deforestation
Labour rights | SOC urges Maximus shareholders to back its shareholder proposal ahead of upcoming meeting
Big tech and AI risk: A new focus in 2024 shareholder proposals
Walgreens shareholders vote down all five shareholder ESG proposals at 25 January meeting
Fossil fuel financing | NYC Comptroller and NYC pension funds file 'Clean Energy Supply Financing Ratio' proposals at major banks
In Brief | Follow This has withdrawn its climate resolution from Exxon, following a court challenge by the company. Follow This states that the 'main reason' behind its decision 'is that Exxon prefers to fight a battle in court rather than allowing shareholders the freedom to vote at the annual meeting'
In Brief | Push for board change at Starbucks continues: SOC has reiterated its previous calls for Starbucks shareholders to back its three board nominees ahead of the upcoming meeting, submitting that 'the current board has tolerated an unacceptable level of reputational risk, a counterproductive approach to labour issues and a flawed allocation of resources' impacting shareholder value

Disclosure and Reporting Navigation Show below Hide below

Greenwashing | ASIC Deputy Chair highlights tackling greenwashing as a top priority in the super context
Investor coalition pushes Bank of England’s Prudential Regulation Authority to introduce tougher climate disclosure requirements
Worker welfare | Workforce Disclosure Initiative transfers to Thomson Reuters Foundation
In Brief | PRI has called on signatories to sign a statement urging relevant authorities across jurisdictions to adopt the ISSB standards on an economy-wide basis by 2025
In Brief | The Global Reporting Initiative (GRI) has released its fourth sector-specific standard – GRI 13 Mining Sector 2024 – which aims to supporting mining organisations to report holistically on their sustainability impacts.
In Brief | CDP's annual non-disclosure campaign involves CDP signatories engaging with companies that have failed to respond to requests to disclose through CDP's climate change, forests and/or water security questionnaires. This year, CDP reports that the campaign has resulted in 317 companies disclosing following 'engagement' with Financial Institutions

ESG Navigation Show below Hide below

Circular economy | European Council and Parliament reach provisional agreement on 'right to repair' directive
Nature-related risk: Swiss financial regulator consults on new circular for banks/insurers
Another step closer to the introduction of a New Vehicle Efficiency Standard in Australia: Further consultation
In Brief | Net zero by 2050 pathway: The European Commission has recommended the adoption of a new interim target to cut GHG emissions by 90% reduction by 2040 (compared to 1990 levels)
In Brief | ESG ratings providers: The European Council and Parliament have reached provisional agreement on a proposal for a regulation to strengthen the reliability and comparability of ESG ratings activities
In Brief | Testing directors’ liability for ongoing fossil fuel investments: With the backing of a majority of shareholders, the current management of Polish coal company Enea is suing the company’s former directors over their (alleged) lack of due diligence in deciding to proceed with a coal plant investment (despite known risks) which resulted in significant loss of value
In Brief | The Lowitja Institute has called on the Federal government to support the establishment of an Aboriginal and Torres Strait Islander Coalition to 'ensure Aboriginal and Torres Strait Islander leadership is central in climate policy decision-making'

Financial Services Navigation Show below Hide below

FAR implementation | ASIC and APRA update banks on their expectations of compliance in the initial months
UCT reforms | ASIC grants a limited 'no action' position on enforcing UCT reforms for institutional markets
DDO enforcement | ASIC accepts enforceable undertaking from BNPL provider
ASIC tells flood inquiry insurers are 'on notice' to act to address known 'weaknesses' in their processes, practices and resourcing
House inquiry into insurers' response to 2022 major flood claims | Key takeaways from ICA CEO Andrew Hall's opening address
In Brief | The Assistant Treasurer has confirmed that as yet, no decisions have been made on potential reforms to the Managed Investment Scheme (MIS) framework. Mr Jones underlined that Treasury's review – which commenced in March 2023 - is ongoing. The Treasury website indicates that Treasury expects to provide its findings to government 'by early 2024'
In Brief | Financial Advice: ASIC has issued a 'final reminder' to the 4.9% of individual 'relevant providers' who are not yet registered with ASIC (by their AFS licensee) to do so as a matter of urgency. ASIC cautions that if they remain unregistered they will need to cease providing personal advice from 15 February 2024 (until they are registered and recorded as such in the Financial Adviser Register). ASIC also confirmed that it 'will commence a program to ensure compliance with this new obligation shortly'

Accounting and Audit Navigation Show below Hide below

CA ANZ release roadmap setting out 14 actions to build trust in the accounting profession

Risk Management Navigation Show below Hide below

Top Story | Australia's evolving cyber security landscape: Consultation Launched
AI is not the 'Wild West': Current regulation around AI may not be sufficient says ASIC Chair (but that doesn't mean that AI is unregulated)
Industry scam codes consultation paper | Consumer advocates call for government's proposed anti-scam measures to include requirements banks to reimburse scam victims
Modern Slavery | Divided views on the scope of the proposed new Commonwealth Anti-Slavery Commissioner's role/functions

Other News Navigation Show below Hide below

In Brief | The government has introduced new legislation into the House of Representatives - Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 (Cth) – proposing to give effect to the changes to the Stage 3 tax cuts announced on 25 January 2024. These reforms are proposed to commence on the first 1 January, 1 April, 1 July or 1 October to occur after the day the Bill receives Assent. The amendments are proposed to apply from the 2024-25 income year